William Blair analyst Dylan Becker has maintained their neutral stance on SPSC stock, giving a Hold rating on April 25.
Dylan Becker has given his Hold rating due to a combination of factors impacting SPS Commerce’s financial outlook and market positioning. The recent acquisition of Traverse Systems is a strategic move that aligns with SPS’s goals to enhance supply chain visibility, efficiency, and collaboration between suppliers and retailers. This aligns with industry trends towards improved delivery performance and inventory accuracy, thus strengthening SPS’s offerings. Furthermore, the acquisition is set to contribute incrementally to the company’s revenue, with expected additions starting from the second quarter of the current calendar year and continuing to grow in subsequent years.
However, while the acquisition is projected to add value to SPS’s business model and offer benefits to its retail-focused supply chain services, Becker perceives the company’s current valuation as fair but not compelling for an upgrade to a Buy rating. SPS Commerce’s stock is trading at multiples that suggest it is reasonably priced given its future revenue and EBITDA prospects. The Hold rating reflects a balanced view of the potential benefits from the acquisition against the broader financial context and market risks such as competitive pressures, dependence on the small business sector, and significant exposure to the retail end-market. Becker’s analysis suggests a cautious optimism, with the company’s current market performance and outlook adequately priced into the stock.
In another report released on April 25, Robert W. Baird also maintained a Hold rating on the stock with a $178.00 price target.
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SPS Commerce (SPSC) Company Description:
SPS Commerce, Inc. provides cloud-based supply chain management services. The firm serves retailers, suppliers, grocers, distributors and logistics firms to orchestrate the management of item data, order fulfillment, inventory control and sales analytics across all channels. Its SPS Commerce cloud services platform offers Trading Partner Community, Fulfillment, Assortment, Analytics, Sourcing, and Other Trading Partner Solutions. The company was founded by Gary W. Anderson and Roger Anderson on January 28, 1987 and is headquartered in Minneapolis, MN.
